Stockton, City of v. Albert Brocchini Farms, Inc.

The court affirms a trial court's exclusion of the testimony in an eminent domain case of a property owner's expert as to the value of the property if it was operated as a landfill. A city initiated an eminent domain action over the property, and during property valuation the owner sought to introduce expert testimony regarding the discounted cash flow of the income that could be generated from hypothetical landfill operations on the property. The district court excluded the testimony, and the owner stipulated to a judgment but then appealed the exclusion of the testimony. The court first holds that the district court properly excluded the testimony of the expert's witness. Generally, during a valuation, the owner must present evidence of income from a business that is conducted on the condemned property or offer proof of rental income from the property. Thus, vacant land similar to the property at issue cannot be the subject of an income study. Moreover, although the right to future exploitation of undeveloped natural resources has a present and ascertainable value for purposes of eminent domain, such value is based on substantial markets with a consistent demand for such resources. A landfill for solid waste, however, is an inchoate service with a highly competitive and volatile market, which renders a claimed expertise at fixing a value for such services chimerical. Further, where the value of natural resources is admissible, the property is still valued as a unit with the value of the natural resources enhancing the value of the base property. Although the owner may be entitled to an enhancement of the property value due to its use as a landfill, the owner failed to provide a basis for the value of the property other than hypothetical business income. The court also holds that the district court erred in failing to offset interest on the award to the owner with the value the owner received in continuing to occupy the property after the city retained the right of possession. The city permitted the owner to continue farming the property, but the business loss that the owner experienced from that farming does not preclude offsetting the fair rental value of the property against the interest for the period of possession.